Arctic drilling might wait until 2013, Interior Secretary Salazar says

A delay in getting oil-spill equipment into the Chukchi Sea north of Alaska means that Shell Oil might not be able to start the first offshore drilling in the Arctic Ocean this year as planned, Interior Secretary Ken Salazar said on Monday.

Shell is still working to meet Coast Guard requirements for its spill-containment barge, the Arctic Challenger, but “if they are not met, there won’t be Shell exploration efforts that will occur this year,” Salazar said sharply on a conference call from Anchorage, Alaska.

Heavy sea ice in the Chukchi and Beaufort seas pushed back Shell’s initial plans to begin drilling in July, but Salazar argued on Monday that Shell bears the blame for not being ready to start drilling now. “It’s not the ice conditions that have held up the effort,” he said. “They have not been able to get it done," he said, referring to the incomplete and uncertified containment vessel. “If they had gotten it done, they may already be up there today.”

Shell issued a statement later on Monday saying it agreed with Interior that drilling should not begin until the containment barge is in place, but it still hopes to begin drilling this summer.

“Progress related to the final construction of the Arctic Challenger containment barge remains steady,” said the statement from Shell spokeswoman Kelly op de Weegh. “We continue to work closely with the U.S. Coast Guard to outline a schedule for final inspections and an on-water deployment that would lead to certification. There’s no set timeline for the completion of this important process.

“This is the world’s first Arctic containment system, and there are a number of major systems that have recently been completed. These systems must now be thoroughly inspected. It’s a process that takes time and one that can’t be rushed.”

Salazar’s conference call was a wrap-up of his three-day visit to Alaska, during which he toured the North Slope and the National Petroleum Reserve-Alaska.

Earlier this summer, Salazar suggested that the Interior Department would make a final determination on Shell’s drilling permits in the Arctic by Aug. 15, and with that deadline not far off there had been some anticipation that Salazar might announce the permit approval on Monday.

But with Shell’s containment barge still subject to Coast Guard certification and time running out, Salazar said that “over the next several weeks, some final decisions will be made.” Salazar wouldn’t say when it might be too late for Shell to move forward with its exploratory drilling program, but noted that “we don’t have a lot of time.”

Shell is required to be out of the Chukchi Sea by Sept. 24 in advance of the harsh Arctic fall and winter and out of the Beaufort Sea by the end of October.

While some lawmakers and drilling advocates have suggested that Interior consider pushing back the end of the drilling season due to the unusually heavy ice conditions in the Arctic earlier this summer, Salazar insisted that Shell’s holdup is “not a matter of ice.”

Salazar noted that the Arctic drilling season is “a very dynamic situation” in which “conditions are rapidly changing.”  Therefore, he said, “we don’t know what will be happening this summer.”

If Shell presents some sort of alternative plan, Interior “will certainly take a look,” Salazar said, but he added that there have been no requests for a change of plans from Shell.

No matter what happens, though, Salazar promised to remain vigilant. “I will hold their feet to the fire in terms of making sure that we’re doing everything we can,” he said.